"We're going to do what we've got to do to win," Yankees co-chairman Hank Steinbrenner told The Associated Press in a telephone interview. "We had to make sure we had enough pitching to go together with our new lineup."

Big league teams had until Friday to reach an agreement with Tanaka, who was 24-0 with a 1.27 ERA last year as the Golden Eagles won the Japan Series title.

His agreement, first reported by Fox, allows him to terminate the deal after the 2017 season. Tanaka receives the highest contract for an international free agent and the fifth-largest deal for a pitcher, trailing only those of the Los Angeles Dodgers' Clayton Kershaw ($215 million), Detroit's Justin Verlander ($180 million), Seattle's Felix Hernandez ($175 million) and the Yankees' CC Sabathia ($161 million under his original agreement with New York).

Tanaka joins Sabathia, Hiroki Kuroda and Ivan Nova in a rotation where the fifth starter's job appears to be open.

His deal pushes the Yankees' payroll for purposes of the luxury tax over $203 million. Barring trades, there is little chance New York will get under the $189 million tax threshold.

Yankees managing general partner Hal Steinbrenner had been saying for two years that getting under the tax threshold in 2014 was a goal but wouldn't get in the way of fielding a contending team.

"There has been criticism of myself and my brother the last couple years that, gee, if our dad was still in charge, we'd be spending this and spending that and doing whatever it takes to win," Hank Steinbrenner said, referring to late Yankees owner George Steinbrenner.

"He didn't have revenue sharing, at least for most of his time," Hank Steinbrenner added. "That's what these people in the sports media don't seem to get. If it wasn't for revenue sharing, we'd have a payroll of $300 million a year if we wanted to. So we're doing this despite having to pay all that revenue sharing."